DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1	Jan. 17	Investment-Red Rock Co. Stock		39,600.00
2		Cash			39,600.00
3	Feb. 5	Investment-Sunset Village Bonds		36,000.00
4		Interest Receivable		310.00
5		Cash			36,310.00
6	23	Investment-Mays and Co. Stock		27,000.00
7		Cash			27,000.00
8	Mar. 31	Cash		360.00
9		Interest Receivable			310.00
10		Interest Revenue			50.00
11	Apr. 6	Investment in Minions Corp. Stock		180,000.00
12		Cash			180,000.00
13	30	Cash		750.00
14		Dividend Revenue			750.00
15	Jul. 1	Cash		20,802.00
16		Loss on Sale of Investments		2,808.00
17		Interest Revenue			210.00
18		Investment-Sunset Village Bonds			23,400.00
19	Aug. 14	Cash		41,300.00
20		Gain on Sale of Investments			1,800.00
21		Investment-Harding Construction Stock			39,500.00
22	27	Cash		3,600.00
23		Investment in Minions Corp. Stock			3,600.00
24	Sep. 22	Cash		30,500.00
25		Gain on Sale of Investments			3,500.00
26		Investment-Mays and Co. Stock			27,000.00
27	30	Cash		150.00
28		Interest Revenue			150.00
29	Nov. 1	Investment in Minions Corp. Stock		21,600.00
30		Income of Minions Corp.			21,600.00
31	Dec. 31	Unrealized Loss on Available-For-Sale Investments		3,275.00
32		Valuation Allowance for Available-For-Sale Investments			3,275.00
33	31	Valuation Allowance for Trading Investments		2,150.00
34		Unrealized Gain on Trading Investments			2,150.00

none

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Investments

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The accountant preparing the financial statements has asked you to provide the fair value

The price that would be received for selling an asset or paying off a liability, often the market price for an equity or debt security.

as of the end of the year for the investments. Present the information as it would be shown on the financial statements. Last year, The Wellington Company reported costs of $68,000 in trading investments and $82,000 in available-for-sale investments. Refer to the journal entries shown on The Wellington Company panel. Assume that all investments sold during this year were trading investments and that purchases during the year were new investments.

1. Select the correct label for each line and fill in the amount. In classifying the investments, choose a categorization which seems most likely, given the pattern of transactions in the journal entries. Enter all amounts as positive numbers. If an amount box does not require an entry, leave it blank.

Trading Securities
selector 1 Trading investments, net Less valuation allowance for trading investments Unrealized gain (loss) on trading investments Trading investments at cost Trading investments at fair value Plus valuation allowance for trading investments
selector 2

	2. Where on the balance sheet do trading securities appear? in the investments section in the stockholders equity section do not appear on the balance sheet in the current assets section
	3. Where in the financial statements do available-for-sale securities NOT appear? selector 2in the current assets section on the balance sheet in the current assets section on the balance sheet in the investments section on the balance sheet as unrealized gains or losses on the income statement in the stockholders equity section on the balance sheet in Other Income (Loss) section on the income statement
	4. Where are held-to-maturity securities reported? selector 3on the balance sheet, in long-term assets on the balance sheet, in long-term assets on the income statement on the balance sheet, in current assets cannot be determined Based on the journal entries for this year, does the company have any held-to-maturity securities? selector 4yes unknown yes no
	5. Where are securities held for strategic reasons reported in the financial statements when using the equity method A method of accounting for an investment in common stock by which the investment account is adjusted for the investors share of periodic net income and cash dividends of the investee. ? selector 5unrealized gains or losses are reported on the income statement on the balance sheet, in the investments section unrealized gains or losses are reported on the income statement on the balance sheet, in stockholders equity it depends on the purchase date of the investment none of these answers is correct Based on the journal entries for this year, does The Wellington Company have any equity securities The common and preferred stock of a firm. ? selector 6yes unknown no yes

Points:

6. Which of the items below does not affect net income? Check all that apply.

both gains and losses of any sort for all investments

realized loss on available-for-sale securities

unrealized loss on trading securities

none of these answers is correct

unrealized gain on available-for-sale securities

only unrealized gains or losses for all investments

realized gain on trading securities

UPDATED Questions: Financial Statements and Valuation The accountant preparing the financial statements has asked you to provide the fair value The price that would be received for selling an asset or paying off a liability, often the market price for an equity or debt security. as of the end of the year for the investments. Present the information as it would be shown on the financial statements. Last year, The Wellington Company reported costs of $68,000 in trading investments and $82,000 in available-for-sale investments. Refer to the journal entries shown on The Wellington Company panel. Assume that all investments sold during this year were trading investments and that purchases during the year were new investments. 1. Select the correct label for each line and fill in the amount. In classifying the investments, choose a categorization which seems most likely, given the pattern of transactions in the journal entries. Enter all amounts as positive numbers. If an amount box does not require an entry, leave it blank. 2. Where on the balance shee do trading securities appear? 3. Where in the financial statements do available-for-sale securities NOT appear? Where are held-to-maturity securities reported? Based on the journal entries for this year, does the company have any held-to-maturity securities? Where are securities held for strategic reasons reported in the financial statements when using the equity method Based on the journal entries for this year, does The Wellington Company have any equity securities yes or no? Which of the items below does not affect net income? Check all that apply. both gains and losses of any sort for all investments realized loss on available-for-sale securities unrealized loss on trading securities none of these answers is correct unrealized gain on available-for-sale securities only unrealized gains or losses for all investments realized gain on trading securities I need help with those 6 questions Thank you